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IMF cuts Sub-Saharan Africa's GDP growth to 4.5%

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Staff writer ▼ | April 16, 2015
Sub-Saharan Africa
Oil plunge   The International Monetary Fund cuts Africa

The International Monetary Fund cut its economic growth forecast for sub-Saharan Africa this year by 1.25 percentage points as oil prices force exporters to cut spending.

Gross domestic product is estimated to expand 4.5 percent, down from 5 percent in 2014, reads World Economic Outlook. Further weakening of growth in China or Europe could reduce demand for African exports and curtail foreign investment in infrastructure and mining.

Nigeria and Angola, Africa's biggest oil producers, are among the hardest hit by an almost halving in crude prices since June. Angola's government lowered budgeted spending by almost a quarter, while Nigeria has proposed cutting the oil price benchmark in its fiscal plan by 20 percent.

"Oil-exporting countries should enact prompt fiscal adjustments, while oil importers' policy stances should strike the right balance between promoting growth and preserving stability," the IMF said.

Nigeria's economy is set to expand 4.8 percent this year, down from 6.3 percent in 2014, while Angola's will probably grow 4.5 percent, compared with 4.2 percent last year, according to the IMF.

The IMF's forecasts for sub-Saharan Africa are more optimistic than those of the World Bank, which said on Monday that economic growth will slow to 4 percent in 2015 from 4.5 percent last year.


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